Rep. Kristi Noem: Tie road money to oil

House bill would pay for highway construction with oil, gas exploration

Feb. 2, 2012

Kristi Noem / Jay Pickthorn - Argus Leader

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Keystone pipeline bill

Rep. Kristi Noem said she would co-sponsor legislation to approve the Keystone XL oil pipeline, citing the Constitution’s Commerce Clause as authority; similar legislation in the Senate has the backing of Sen John Thune. The Obama administration last month denied a permit for the pipeline, which would carry Canadian tar sands crude from Alberta to the Gulf Coast.

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Rep. Kristi Noem of South Dakota and other House Republicans are pushing a highway bill that would tie transportation spending to royalties from expanded oil and gas exploration — a major departure from how road and bridge construction usually is paid for.

Prospects for the $260 billion, five-year American Energy and Infrastructure Jobs Act appear dim. The Senate is working on a two-year extension of federal highway legislation that has bipartisan support.

The House plan has drawn broad opposition. The free-market Club For Growth is urging members of Congress to vote no on the legislation, citing budget concerns, and environmentalists at the Natural Resources Defense Council are calling it “the worst transportation bill ever.”

“This is a hyper-partisan bill that offends almost everyone,” said Kevin Brubaker, deputy director of the Environmental Law and Policy Center.

Noem said Thursday that the bill represents a new, better approach to paying for highway spending, without earmarks or new debt.

The legislation, which was marked up Thursday in the House Transportation Committee, would pay for highway and bridge construction using royalties from expanded offshore oil and gas drilling. It also would open the Arctic National Wildlife Refuge to drilling and encourage the mining of kerogen, or oil shale, which has not been commercially produced and which many energy experts consider a speculative bet.

“Opening up new resources also means that we will generate new revenue that can be used to build these roads and bridges and other infrastructure projects that badly need to be updated,” Noem said.

Acknowledging that revenue from drilling leases wouldn’t immediately cover the ongoing shortfall in the federal Highway Trust Fund, which uses fuel taxes to pay for road construction, Noem pitched a plan to have federal employees contribute more to their retirement funds, shifting some of the burden from taxpayers. This would raise $26 billion, she said.

But Bob Poole, director of transportation policy for and co-founder of the libertarian Reason Foundation, said this so-called drive-and-drill approach “just destroys the concept of a highway trust fund — that users pay and users benefit.”

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The trust fund has been protected from general cutbacks for four decades — but only if 90 percent of the money comes from user fees, Poole said.

“If they actually succeed in passing this — and I don’t think they will — it would trash the concept of a specially protected account,” he said.

Among other things, the House bill would:

■ Eliminate funding for several public transit, bicycle and pedestrian transportation programs. This includes the Safe Routes to School program, which awards grants to cities to build sidewalks, crosswalks, bike paths and other projects to help ensure that children can walk or bike to school safely.

Twenty-three school districts in South Dakota have taken advantage of these grants, according to the state Department of Transportation.

Noem said the House bill is carefully targeted to include only true highway spending, since previous transportation bills have included money for parking lots, baseball parks, beautification projects and other nonhighway spending.

“It’s much more specific,” she said. “It’s dedicated toward bridges and roads, and I think that that met a lot of the concerns that people had in the past — that transportation funds had been diluted.”

■ Expedite federal environmental review of road and bridge projects, which environmental groups said falsely assumes that environmental concerns are standing in the way of highway construction.

■ Allow longer, heavier trucks on the highway — 20 percent heavier than what’s allowed now. Opponents say this would wreck roads and bridges that already are in bad shape.

She said funding formulas for each state still were being hammered out, but that it was her understanding South Dakota’s funding level would remain “relatively unchanged.”

“I know a lot of people in South Dakota were very concerned — that we would end up with a cut,” she said.

The Senate banking committee, led by Sen. Tim Johnson, D-S.D., passed a bill Thursday that reauthorizes public transit programs at current levels for two years. The bill includes a new formula for allocating highway money to rural areas and would increase South Dakota’s share of federal transit revenue by 26 percent compared with 2011 levels.

“These increased funds will help South Dakota’s transit providers maintain safe and modern infrastructure, while keeping pace with growing demand for public transportation in the state,” Johnson said in a news release.

Noem said the Senate’s two-year extension is not sufficient.

“Anybody who’s in the infrastructure business knows that it takes awhile to get these projects put into place, and if we can give them five years to start looking at it now, that would be wonderful,” she said.

Sen. John Thune is waiting for a final bill to emerge in the Senate but generally supports the version that came out of the Environment and Public Works Committee, spokeswoman Andi Fouberg said.